Minister of Health- Financial Assistance Reform Statement & Press Release

Mr Speaker, I rise today to provide this Honourable House with an update on my Ministry’s intentions regarding the financial assistance programme.

As you know, it is the Government’s intent to reform the programme, and this initiative was included in this year’s Throne Speech. However, the work was begun last year with the establishment of the Financial Assistance Reform Group.

Mr Speaker, The Reform Group worked diligently and produced a final set of recommendations detailed in their Financial Assistance Reform Group Recommendations Report.

When the Department of Financial Assistance was moved to the Ministry of Health, we reviewed the recommendations and Cabinet has accepted a number of them, which will pave the way to reform the programme.

The Report has been published on our website, along with details of the recommendations that will drive our reforms.

But first, Mr Speaker, I want to set the context about the Financial Assistance programme, as I have found that there are many misconceptions about the programme and the population it serves.

To begin, I think the public would like to understand that most Financial Assistance recipients are seniors, disabled persons and child day care recipients. Only 26% are able-bodied adults.

In fact, as at January 2019, there were 3,268 recipients in total, as follows:

  • 1,184 Pensioners/Seniors                                                                               
  • 896 Persons with disabilities    
  • 214 Abled-bodies unemployed              
  • 362 Persons with low earnings               
  • 612 Child day care allowance   

Financial Assistance is committed to making work pay and its award structure provides a foundation for this, as persons do not lose all benefits if they find some employment. More work is being done to advance this policy to help get more people back to work.

Mr Speaker, When the Reform Group was first established, its intended purpose was to reduce abuse, discourage dependency and ensure that work pays. These are important goals, however, in light of the profile of the persons in need of such assistance, and the type of supports granted, it has become clear that the focus of reform should be on making the programme financially sustainable, improving efficiency and ensuring a more equitable allocation of awards.

Our decisions have been guided by the Internal Audit report completed subsequent to the Reform Group’s conclusion. There were a number of overlaps between the two, but together, and in light of the appointment of a new Director of Financial Assistance, we have been able to have a more focused and targeted approach to achieve the most impactful reforms.

To begin, Mr Speaker, the Internal Audit report recommendations are being acted on immediately to bring urgent essential improvements as soon as possible over the next 12 to 18 months. These have already begun and will reduce waste, control budgets and improve service to recipients and applicants. For example:

A working committee has been set up to improve the current database system and use technology to improve efficiency in the future.

Customer service training is being sourced to commence before summer.  We want all of our workers to have a courteous, sensitive and professional approach towards our clients and their needs.

A new intake process is being implemented. The department has reviewed their ‘pre-screening’ process and the new system should reduce the time that clients will have to sit for their initial interview.  Further, a 30 day window has been implemented so that clients will receive a response in a timely manner.

Job Search sheets have been replaced with mandatory usage of the Bermuda Job Board. Clients are expected to visit the Department of Workforce Development, meet with a Career Development Officer, have their resumes updated, participate in skills testing and search for employment opportunities on the Job Board.  Evidence of this activity must be submitted to the Department of Financial Assistance to qualify for a financial award.

Mr Speaker, in addition to these operational improvements, we will be strategically focused on ensuring a more equitable allocation of awards and achieving financial sustainability of the programme. In this regard, a fundamental reform we will undertake is to change the formula that is used to determine eligibility and awards. Specifically, we will amend the legislated formula to establish awards so that eligibility is based on measures associated with the ‘low income threshold’ calculated by the Department of Statistics, rather than the current (allowable) Expenses – (qualifying) Income = (FA) Award.

Further, Mr Speaker, as Minister of Health, I want us to see changes that will discourage the purchase of non-nutritive food and beverages, as is currently done with tobacco and alcohol. And I would like to find ways for the Government to recover debt and/or off-set the cost of benefits through the property of deceased financial assistance recipients. Mr Speaker, as a country we can no longer afford for the state to subsidize persons’ inheritances, as currently happens.

Mr Speaker, Honourable Members, as you will know the Financial Assistance programme is vital to our community. It is the only form of welfare available to assist the vulnerable, frail and infirm, and the only means to prevent families from descending into poverty. However, funds are finite and we have to make sure that we use them efficiently and they reach the right people. We expect that the reforms under way will change the face of the programme to achieve financial sustainability and a more equitable allocation of awards.

Thank you, Mr Speaker

Reform Group Recommendations

Financial Assistance Reform Group Recommendations

Today Minister of Health, the Hon. Kim Wilson, JP, MP updated the House of Assembly on the Government’s reform of the financial assistance programme. The report by the Financial Assistance Reform Group will be published on its website at www.gov.bm/reports. The report contains 30 recommendations, 17 of which have been prioritized. The Ministry’s priorities for the programme are to ensure a more equitable allocation of awards and achieve financial sustainability.

Financial Assistance Reform Group 30 Recommendations

Recommendation

Decision
  1. Review organizational structure and operation of the Department of Financial Assistance to determine the optimal structure to meet current and projected client demand. (Recommendation 1)

Accepted
  1. Relocate the Department of Financial Assistance offices to suitable premises that are located at street level, thereby providing easier access for seniors and other financial assistance clients. (Recommendation 2)

Accepted
  1. Consider organizing financial assistance work teams by client category, with several work teams servicing the larger financial assistance categories e.g. seniors. (Recommendation 3)

Not accepted: Will conduct review by management services to determine best practice operational procedures and structure.
  1. Establish individualized case management plans for able-bodied unemployed financial assistance clients. This service should be provided by the Department of Workforce Development in collaboration with the Department of Financial Assistance. (Social workers should be sourced from internal and/or external to Government). (Recommendation 4)

Accepted
  1. Firmly establish the job search component for able-bodied unemployed financial assistance clients under the Department of Workforce Development and target job searches as part of a case management plan that provides appropriate guidance. (Recommendation 5)

Accepted
  1. Re-examine the policy on overseas travel while on financial assistance with a view to reducing potential abuse of the system in this area. (Recommendation 6)

Accepted
  1. Conduct more frequent advertising of the Department of Financial Assistance’s Hotline number. (Recommendation 7)

Accepted
  1. Amend the Financial Assistance legislation to clarify the definition of a “senior” as being distinct from a person who receives a pension before the age of 65. (Recommendation 8)

Accepted
  1. Encourage persons earning a pension before age 65 to take part-time employment to offset payouts from Financial Assistance. Similarly, encourage seniors on financial assistance to engage in limited part-time employment, whether they are able-bodied persons or seniors with disabilities. (Recommendation 9)

Not accepted: these opportunities are becoming fewer in terms of where work can be found.  All clients are encouraged to work and volunteer wherever possible.
  1. Request the Attorney-General’s Chambers to provide a legal opinion regarding whether a person who inherits a property from a senior who has benefited from financial assistance should be statutorily required to pay back some portion of the funds to Government. (Recommendation 10)

Accepted
  1. Review social policy in other jurisdictions to determine whether any mechanisms are in place to enable governments to recover financial benefits paid to seniors who own property. (Recommendation 11)

Accepted
  1. At no cost to the applicant, the Department of Financial Assistance should consult with the Department of Immigration as needed to determine whether an applicant for financial assistance has Bermudian status. (Recommendation 12)

Not required: this is already in place. DFA can now go directly to DOI to gather such information.
  1. Amend the Financial Assistance Act 2001 to specifically state that financial assistance benefits awarded under the Act are intended to be short-term in nature and wean people off of financial assistance. (Recommendation 13)

Not accepted: The number of people reliant of this program will continue to be dependent until other economic factors change such as employment availability, cost control of a ‘basket of staple foods’, livable wage etc.
  1. Explore incentives that can be offered to employers who hire Financial Assistance clients e.g. payroll tax reductions to employers who employ Financial Assistance clients for at least 6 months of the year.  Such incentives must have a net benefit to Government. (Recommendation 14)

Not accepted: Viability and impact are not certain as this program has not had a great amount of success at DWD with apprentices/trainees.
  1. Develop and introduce a bona fide unemployment insurance scheme (separate from the Financial Assistance Programme and not operated by the Department of Financial Assistance) which would benefit persons who find themselves transitioning between jobs or who remain unemployed over a period of time, reducing the strain on Financial Assistance. (Recommendation 15)

Not accepted: More analytics and development required to assess viability.
  1. Consider introducing a special tax and earmark the resulting tax revenues (either within or outside of the Consolidated Fund) to be used to directly benefit seniors who qualify for financial assistance based on means testing. (Recommendation 16)

Not accepted: Additional taxes are not deemed viable.
  1. Amend the Financial Assistance Regulations 2004 to reduce from $5,000 to $500 the amount of money a senior can retain in their bank account that is not included in financial assistance calculations.  Seniors would be required to spend down to $500 (as do other financial assistance clients) to be eligible to receive a financial assistance award. (Recommendation 17)

Not accepted: Unclear how this will benefit the department other than the initial savings.  In fact, in order to get clients off of the assistance program they should be allowed to save a certain amount of their funds otherwise they will not have the opportunity to ‘catch up’ and become self-sufficient.
  1. Amend the Financial Assistance Regulations 2004 to require that all pension amounts be treated as calculable income for the purposes determining financial assistance awards, instead of excluding $500 in pension money from calculable income as at present. This could yield up to $500,000 in savings per month and up to $6,000,000 in savings per year. The savings realized could help to fund the projected increase in numbers of seniors on financial assistance in the future. (Recommendation 18)

Not accepted: Not viable as there are less and less seniors that have any savings.
  1. Establish a specific Government Task Force or Joint Select Committee of Parliament for the sole purpose of recommending strategies to ensure that the Island is prepared to care for and service the current and future senior population, especially those who require financial assistance. (Recommendation 19)

Not accepted: There are a number initiatives and seniors groups/churches that apply time and resources to this subject.
  1. Financial Assistance staff should receive customer service training on a regular, ongoing basis. (Recommendation 20)

Accepted
  1. Government should urgently review the need to recruit additional staff in the Department of Financial Assistance, particularly in view of the expected increase in the numbers of seniors applying for and qualifying for financial assistance in the coming years. (Recommendation 21)

Accepted
  1. Undertake a review of the appeal process under the Financial Assistance Regulations 2004 with a view towards streamlining the process so that clients making an appeal are not disadvantaged. The total time taken from notification of the Director’s decision to the determination of an appeal should be between 30 – 45 days instead of over 100 days as at present. (Recommendation 22)

Accepted
  1. To expedite appeal hearings and decisions, consider increasing the size of the Financial Assistance Review Board from five (5) to seven (7) members, with a quorum of three (3) or four (4) members. (Recommendation 23)

Accepted
  1. Amend the Financial Assistance Act 2001 to more clearly define “financial assistance” by indicating what a “minimum standard of living” actually means in terms of a basket of goods and services that are to be provided for in the Schedule - Table of Allowable Expenses under the Financial Assistance Regulations 2004. (Recommendation 24)

Accepted
  1. Reduce the total allocation for the Child Day Care Allowance Programme from $3,400,000 to $2,400,000 in fiscal year 2019/20 to realize a savings of $1,000,000. This will not affect the amount paid per child, which should remain unchanged at $800/per month/per child. (Recommendation 25)

Not accepted: This will place the programme in a vulnerable position.
  1. The Department of Financial Assistance should require, as a matter of policy, that able-bodied unemployed clients undertake a second Money Management and/or Life Skills course/workshop after one year being on financial assistance. (Recommendation 26)

Accepted
  1. The Department of Financial Assistance should offer financial assistance able-bodied unemployed clients (and possibly financial assistance clients earning low income) the opportunity to participate in the Mirrors Programme. (Recommendation 27)

Not accepted: The purpose is unclear. A needs assessment would be required first.
  1. Government should devise a strategy for reducing food costs. For example, examine the possibility of buying various bulk food items to supply to financial assistance clients (e.g. breakfast items). (Recommendation 28)

Accepted (where viable)
  1. Government should consider mandating island-wide price controls for certain food items that are being purchased by persons who show proof that they are financial assistance clients. Alternatively, negotiate with major grocery store chains to put in place a rebate system specifically for financial assistance clients. (Recommendation 29)

Accepted (where viable)
  1. The Department of Financial Assistance should re-visit the concept of a generic drugs policy with a view towards developing a policy that maximizes cost savings for prescription medication, whether generic or brand name prescription drugs. (Recommendation 30)

Not accepted: Unviable as there are few suppliers of prescription drugs, they are imported without coding, and controls in addition to existing ones are unviable without coding.

 

 

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